Subject: File No. 265-25-05
From: Jean A Rogers, Ph D
Affiliation: Principal, Arup

July 9, 2010

Enclosed please find our paper called From Transparency to Performance: Industry Based Sustainability Reporting on Key Issues, found here online: The paper was recently published by the Initiative for Responsible Investing at Harvard University. It is authored by Steve Lydenberg, fellow of the Initiative for Responsible Investment and Chief Investment Officer at Domini Social Investments David Wood, Director of the Initiative for Responsible Investment and Jean Rogers, Principal, Arup.

We are submitting this for consideration by the Investor Advisory Committee as part of the formal record.

We know this topic is extremely important to the SEC. We applaud your recent ruling on the materiality of climate change. This paper can help the SEC to understand how to give companies the clear guidance they need on the materiality of broader sustainability issues and how to disclose risks and opportunities.

This report puts forth a method to identify sustainability key performance indicators by industry sector that could work in the United States- where there is a perception that additional reporting means additional burden, and there is little patience for ambiguity in reporting requirements. Our goal was to devise, within a broad set of environmental, social and governance (ESG) factors, a method to identify those that are most relevant to the full range of stakeholders for a particular sector, and can best promote improved corporate performance on vital social and environmental issues. The press release and 2-page brief, attached, describe the report in greater detail.

The SEC has an opportunity to define, by sector, KPIs that should be reported as a minimum in the form 10-K, thereby sending clear signals about what matters in terms of sustainability. Mandatory reporting by all companies on a few KPIs relevant to sector activities would level the playing field and drive competition on sustainability performance. This paper presents a method for arriving at those KPIs that is flexible, transparent, and based on materiality. It can be done with input from multiple stakeholders and updated as necessary. It is complementary to the principles of sustainability reporting put forward by the Global Reporting Initiative, but goes one step further by defining the minimum material reporting requirements by sector. Concise and specific guidance will be needed for US companies to implement sustainability reporting in a cost effective and high-value manner.

We recognize that the task at hand is challenging and its implications extend well beyond regulators and the financial community. However, in a world with comparable KPIs for relevant issues, sustainability reporting can fulfill its true potential: providing concise, transparent information that clearly reflects the reality of environmental and social impacts, allows for benchmarking, highlights long-term risks and opportunities, and contributes to improved levels of public and investor confidence.

If mandatory sustainability reporting is a goal in the US, then the SEC has the responsibility to provide clear guidance on the minimum KPIs to be reported by sector, based on a transparent materiality analysis. The resulting KPIs would be closely aligned with core business operations and therefore have the potential to move entire sectors towards better performance and increased competitiveness. We believe a system like this could be easily implemented within the Form 10-K reporting format.

We would be delighted to contribute further to the important work that the SEC is doing in terms of understanding the materiality of sustainability issues and the associated disclosure requirements, and we welcome inquiries on our work.

Best regards,


Jean Rogers PhD PE
560 Mission Street Suite 700
San Francisco CA 94105

(Attached File #1: 2652505-1a.pdf) (Attached File #2: 2652505-1b.pdf)